Going by the new capital requirements released by the Central Bank of Nigeria (CBN) for commercial, non-interest and merchant banks on Thursday night, 25 banks operating in Nigeria would need to raise not less than N3.894 trillion in fresh capital to meet up with the new minimum capital base.
This is as the apex bank have been cautioned to watch out for inflows of illicit funds that may be directed towards the capitalisation bid of the banks.
Having mentioned late last year at the Bankers Dinner in Lagos that the apex bank would beworking on a recapitalisation bid for the banking industry to cater to the $1 trillion economy that is being targeted by the President Bola Ahmed Tinubu led government, the Dr Olayemi Cardoso-led CBN made good its word with a steep increase in the required capital base for commercial, non interest and merchant banks in the country.
According to the new requirement, commercial banks with international licenses are required to have a capital base of N500 billion while their national and regional counterparts are required to have capital base of N200 billion and N50 billion respectively.
Similarly, the capital base of national non-interest banks were raised to N20 billion while that of regional non-interest was raised to N10 billion. Merchant banks capital base was also raised to N50 billion.
Findings showed that while the fate of some banks with holding company structure are not fully clear, nearly all the banks with the exception of the two regional non interest banks met the new capital base. Taj Bank and Lotus Bank both have currently more than the N10 billion that is required for them to continue operation.
In total, the 25 banks surveyed by LEADERSHIP showed a cumulative N2.049 trillion in paid up capital and share premium. This means that the banks would be needing a total of N3.894 trillion to meet up with the new capital base should they decide against mergers, acquisitions and reclassification.
Speaking on the capital base, Head of Financial Institutions at Agusto & Co, Ayokunle Olubunmi noted that whilst the recapitalisation bid will see another interesting couple of years in the banking industry, the CBN has to be cautious in ensuring that the industry is not flooded with illicit funds.
According to him, the apex bank will have to shore up its oversight and regulatory functions to ensure that flow of funds from terrorism, corruption and illicit proceeds are not laundered through the recapitalisation of banks.
